Blockchain: Measuring a path to success?
Recently, I attended a roundtable on Blockchain with a group of digital agencies in London, who are in various stages of adoption of the technology to solve business problems. Blockchain, for the uninitiated, is a decentralised, secure ledger that can record transactions in an immutable way. It was originally invented as the ledger for the cryptocurrency, bitcoin; as a result, Blockchain has always been associated with cryptocurrencies.
At the roundtable, some attendees were extremely advanced and clearly represent the leading pioneers in the space, others were interested and in the early stages of development, and some (frankly, like me) who had some potential use cases that could drive development, but wanted to know more.
It was a very interesting discussion, and I can see opportunities to use Blockchain in relation to insight and marketing, primarily in relation to digital media engagement and attribution. That said, there are clearly many more use cases in relation to supply chain or provenance type area than there are, at least at the moment, in analytics.
However, apart from the specific use cases that we discussed, the most interesting points for me was how the “Blockchain industry” was described by those around the table. At one point, the Blockchain community was described as a “guild”, an association of disparate artisans or experts in different locations. Another said that there were “islands” of knowledge, another described a metaphor akin to the Wild West and the California Gold Rush of the 1840s, and there was even one person who thought that it was like the early years of the Internet in the American universities and laboratories of the 1960s.
As you can tell, the theme is clear; it’s very early days. There are pockets of individuals or teams developing Blockchain solutions, but it’s not even close to becoming mainstream. I think it’s a bit more developed than where “big data” was a couple of years ago, when it was a technology waiting to find a problem it might solve, without any clear use cases; as mentioned, there are several of these. However, it seems that the greatest opportunities are in areas where origination or consistency across multiple stakeholders matter.
The challenge with all historical metaphors described above is that none of them actually quite fit, or rather, I think two of them could, although neither do perfectly. I think it’s tempting, and attractive, particularly to those already in the “Blockchain community”, to think of a medieval guild of experts, like the masons for instance, who developed to maintain a standard of excellence in a highly technical field, and which could be internationally recognised as such. The problem with this is two-fold. Firstly, it took hundreds of years for these trades to develop sufficiently – in terms of skills, demand, networks and social significance – to be recognised as guilds or livery companies. Even with an increased speed to market that we see in today’s world, Blockchain is still only a few years old as a technology, so it doesn’t have a widely-enough recognised set of best practice to be seen as a fully-fledged guild, yet.
The second challenge is that the medieval guilds often operated as protectionist trade unions; if you weren’t qualified to the standards of the guild in the city, you were not allowed to practice that trade there. Whilst this obviously kept standards high, it did mean that the skills were only available to those who were part of the club. This may be advantageous to differentiate between the real Blockchain experts and those who are just in it to create cryptocurrency tokens and play a speculative game on the new money markets, the industry doesn’t need to restrict itself to a few practitioners in order to grow, it needs to broaden its horizons.
This means that the current state of the Blockchain world seems more akin to the Gold Rush of the late 1840s. The big technology providers are providing infrastructure tools to facilitate developers to build applications, which sounds remarkably similar to the sellers of shovels and spades to the prospectors in California. It also fits with the small communities of expertise in an otherwise large expanse of sometimes dubious landscape, where there may be some “get rich quick” snake oil merchants who are in it for the cryptocurrency. I think it’s this aspect of the landscape that needs to progress in order to give wider business stakeholders more confidence in the technology; because at the moment it’s difficult to evaluate what success might look like.
This is where I think measurement and analytics comes in. Having been involved in digital analytics and insight for 20 years, and therefore having seen several new technologies emerge, one of the trends I have noticed is that measurement and analytics becomes important for the continued development of a particular technology.
There is always a lag between the creation of a new tool, and the need to measure its performance; there’s no point investing effort in recording on a platform when you don’t know whether anyone is going to use it; it’s far better to spend more of that initial effort on making the tool more usable or stable than tracking things. However once you are over that first phase, and some use cases are emerging, it rapidly becomes important to prove business cases and demonstrate clear return on investment in order for tools to enter the mainstream. That’s where measurement planning and tracking comes in.
Thus far Blockchain hasn’t worked out what real organisational value it can generate; it could be about efficiency or productivity, but that can be a particularly hard case to prove, and doing so takes forethought and complex planning. Even worse, in fact, much of the perception of the value of Blockchain is in relation to the cryptocurrencies. This means that it doesn’t really matter what job is being done, just that it generates a bitcoin at the end (other currencies are available!). Many of the projects being implemented or considered for Blockchain haven’t truly considered the business, organisational or societal benefit of the project itself. This marks it out as something of an exception to many of the digital innovations of the last 20 years, where the tools have lived and died by ROI, and haven’t had the “luxury” of generating a currency just by doing whatever has been asked of it.
The more those in charge of commissioning Blockchain projects switch to ignoring the by-product, and focusing on proving ROI of the projects on their own terms, the greater the chance that Blockchain will emerge as a “successful” technology with a legitimate, long-term future, rather than generating a fast buck. If you are one, get in touch with the experts in digital measurement and demonstrating and optimising Return on Investment, and speak with Station10.